Buying or Selling a Home in ‘AS IS’ Condition

When a buyer finds a listing for a home, they typically examine the location, the price and the photos, then they begin to read the small print. The taxes, lot size, school district and then come the remarks section where the listing might be advertised as to be SOLD IN ‘AS IS’ CONDITION.

So what does this really mean?

To the seller it means: Buyer Beware!  What you see is what you get and WE ARE NOT FIXING ANYTHING. We priced it low so we can sell it with all the problems we know about, and maybe even some things we don’t know about. We just don’t want to make repairs, so get ready for a project!

We’ve all seen these phrases:

Needs some TLC… Real Meaning: It’s a dump with potential.

Diamond in the rough… Real Meaning: It’s a dump with potential.

Fixer Upper… Real Meaning: It’s a dump with potential.

Priced Below Market… Real Meaning: It’s a dump with potential.

Ok – maybe it’s divorce or  a short sale; I may be exaggerating to make my point but this is happening too often for me to believe that no one can read English and comprehend the meaning.

Lately, the agents at Towne Realty Group in Short Hills, NJ, say it it has become a standard negotiating tactic. Buyers  first want to secure a house and then later, try to renegotiate after the inspections.

Sellers offer disclosures about the age of the roof or the furnace, they say they they are ‘as is’ and the buyer agrees to this while making his offer. Sometimes the buyer even adds a clause into his contract stating: Inspection subject only to serious structural, mechanical or environmental conditions.

Somehow, after the home inspection, ten days to two or three weeks later, (after all the other buyers are gone) the buyer complains that they did not understand the disclosure. They did not realize what it meant to buy a house ‘as is’ or did not realize how much it would cost to repair or replace various items. Often their attorney will argue that they did not know it was such a serious problem.

Perhaps this is a result of a language barrier or people being scared, but it happens so regularly, it seems a bit vexing that so many people who are buying houses, don’t understand what they are getting into.  Over and over, many buyers continue negotiating right up until the day of the closing, looking for discounts at every turn.  Buyers come looking for problems at the walk through, as if asking for a few hundred $ for a fallen fence (that they failed to notice during the inspection) is now going to justify the price they paid.

What part of the words in this next sentence is difficult to understand?

‘The air conditioning is beyond its life expectancy and will not be replaced.’

Just recently I sold a house to a buyer who signed a disclosure with that very sentence and now, a few weeks later, the lawyer, the buyer and his Realtor are all arguing that they did not understand the ‘true’ meaning of that sentence.

Am I the only one who finds this hard to believe? I’d appreciate your feedback.

Comments

  1. Angie Perez says

    I find it hard to believe that the buyer and his/her agent did not understand the meaning of that statement. I would say that I am generally surprised by the amount of stuff wrong with a home that some sellers live with, but I know better. I once met a seller who went 4 years without a working furnace and insisted upon selling the house as is even though he knew his furance was not functional. Maybe that sentence need to be expounded upon with someone like: Seller will not offer credit or repair for the air conditioning Seller acknowledges that the unit is beyond its life expectancy. Buyer has been forewarned should not ask for credit or repair prior for this item prior to closing.

  2. Karen Eastman Bigos says

    Angie – thank you for your comment. Sometimes a property is an estate and the heirs or executors do not have any idea what is wrong with the house. They price it accordingly (hopefully) with the understanding that they know some or many things are wrong. Some people cannot afford to make repairs or they are delusional/blind/old/depressed/sick/argumentative (you name it) and just don’t see all the issues. I think you are right to say that the disclosure should not say ‘as is’ but exactly what the seller will or will not pay for if they already know it is in need of repair/replacement and they are unwilling to address the problem. As we know, buyers can cancel (as can a seller) for any reason and sometimes they just say: I did not understand the disclosure or what ‘as is’ meant. We all know they really want out of the deal and they are allowed to run!

  3. Angie Perez says

    Estate sales can be a mixed bag. Some executors have some knowledge of the home; sometimes they have docs like roof warranties and the such, and sometimes they don’t know enough to even take an educated guess. It is what it is. But, that’s what they pay us the big bucks for. To find a willing and able buyer; to negotiate and reach a meeting of the minds not only on price but also on the issue of credit for repairs and the likes. Your story really resonated with me though. Will come back and read more!

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